ABA Section of Business Law

Snap Judgements

Big Brother's helper
Yes, yes, power is knowledge, but probably even George Orwell would balk at the idea of making it still easier for any busybody with a computer to poke around in other people's lives.

Well, hold onto your ideals, George, one-stop Big Brother shopping is coming to a computer near you. Heralding itself as a shortcut to information and peace of mind, BackgroundCheckGateway.Com sets the worried, the curious or the downright nosy off on a personal-information, fact-finding mission free of charge.

According to Washington Research Associates, this new service requires "no background-checking experience" and gives users the tools to find the dirt on prospective employees, tenants or even dates and fiances. The 300-plus page site offers ways to dig into someone's criminal, educational and financial past, leaving practically no stone unturned.

"I think most background checks should be free," says company president Warren Ryan. "After all, they're based almost entirely on free, easy-to-access public records like court litigation files, driving records and property records. Yet private investigators and online information brokers charge people and companies substantial - sometimes exorbitant - fees for this type of information."

And here we thought that prying into people's lives was just one of those things best left to the government.

M&A down, bankruptcy up
The mercurial economy may have Grandma wondering what's to become of her retirement income, but the apparent slowdown means big business and big bucks to the nation's bankruptcy lawyers.

According to a Chicago Tribune article, corporate bankruptcy claims are on the rise and firms nationwide are scrambling to make sure they have enough staff to meet the increased demand.

In fact, according to the article, 176 large, publicly traded companies filed for bankruptcy in 2000. That's 21 percent more than 1999 and a 44 percent jump since 1998. Even household names like Montgomery Ward & Co., TWA and Vlasic Foods International Inc. have joined the growing ranks of business filings.

In the race to fill bankruptcy departments, some firms are offering signing bonuses of up to $10,000. But don't feel sorry for the short-handed firms; they have themselves to blame in part for being caught flat-footed as the bankruptcy cases roll in.

"It's the same firms who were looking for corporate and mergers-and-acquisitions associates like gangbusters two to three years ago who are looking for bankruptcy associates now," Chicago Legal Search Ltd. recruiter Alan Rubenstein told the Tribune.

For Grandma's sake, hopefully all these new bankruptcy associates will still have some time in between billable hours for pro bono bankruptcy work.

Forget apple pie?
God bless America, where all citizens have the right to vote, everyone can receive a free high-school education and William Porta can set up a Web site complaining that an airline lost his luggage.

Forget Mom, forget the flag, forget even apple pie, because, according to Public Citizen, the hallmark of American values in the 21st century is www.alitaliasucks.com.

According to Public Citizen, Alitalia Airline's copyright infringement lawsuit against the disgruntled passenger has no merit because Porta has a fundamental right to express his unhappiness at attending a black-tie function in India in casual clothes after the airline lost his luggage.

"The law is quite clear about consumers' speech rights," said Public Citizen's Paul Alan Levy. "Consumer commentary is protected. That means that anyone can take out a full-page ad about the company or post criticism on the Web. In fact, the law specifically protects the information Mr. Porta posted."

The law in question is the 1999 Anticybersquatting Consumer Protection Act, which Public Citizen says was passed in response to individuals buying domain names that were also the trademarked names of companies or groups.

But clearly the law does nothing to protect the rest of us from tacky Web site names.

I'll give you debilitating
The changing nature of product-liability suits is putting a new twist on the idea that it's not quantity, it's quality. According to The New York Times, the number of cases involving defective goods is declining, while the size of the awards in those cases filed is skyrocketing.

In fact, the median award has more the tripled, from $500,300 in 1993 to $1.8 million in 1999. Meanwhile, the total number of federal product-liability cases decreased more than half from 32,856 in 1997 to 14,428 in 2000. The reason for the change, according to the article, is that lawyers are not taking on clients unless their injuries are "debilitating enough to bring in big awards."

"I've had plenty of defective products, clearly defective, where I won't even talk to the people because their injuries aren't severe enough," said Craig E. Hilborn, president of a small Michigan firm. "If they're not a quadriplegic, a paraplegic or losing some part of their body, there's no way I'm going to take that case." Now that's quality.

Give me a break!
Even bad guys need someone on their side. Big tobacco is no different. So, if high-powered corporate lawyers and beholden elected officials weren't enough, now Philip Morris Inc. has the Washington Legal Foundation fighting on its behalf.

In a dense, four-page "legal backgrounder," the foundation's team of experts goes into copious detail about how the federal government has overstepped its bounds in pursuing a case against Philip Morris under the Racketeer Influenced and Corrupt Organizations Act (RICO).

Perhaps if the folks at the WLF had taken a look at President Bush's budget proposal and seen that it didn't include the funding necessary to pursue federal tobacco legislation, they could have saved themselves some time - maybe even enough time to step outside for a cigarette break.

Hey! Chill the details!
There's no accounting for taste, but the reason behind the creation of an International Accounting Standards Board is clear: The continuing expansion of international trade has made establishing a global standard of accounting practices essential.

"If we're going to have integrated international financial markets, information must be reliable," former Federal Reserve Board Chairman Paul A. Volcker recently told The New York Times.

To that end, the 14-member board will work over the next three years to establish uniform accounting standards accepted by leading countries, the Times reported.

But more than being a reaction against the confusion created by lack of international uniformity, the board was also created in part as a reaction against over-regulating.

Volcker further told the Times that "the standards may be general but they will not be loose." We suspect that the final guidelines issued by an international team of accountants will be nothing if not detail-oriented.

Pushing for a hangup
Cell phone users may be annoying at the movie theater, but they can be downright deadly when they get behind the wheel of a car. As a result, The New York Times reports, 35 states have bills under consideration that would ban the use of cell phones by drivers.

So far, 11 local governments have banned using a cell phone while driving. According to the article, the powerful lobbying force of the cell-phone industry has prevented any statewide action to date.

Advocates of restricting cell phone use, however, can find some satisfaction in the fact that 22 countries have already restricted cell-phone use while driving, the article said. But with high-dollar industry lobbyists in play back in the states, an outright ban may be hard to enact.

"With all the new technology that's going out on the road and polls showing most people supporting restrictions, you can definitely foresee some kind of limitations passing eventually," said Matt Sundeen, a transportation specialist with the National Conference of State Legislatures. "Probably a compromise of some sort, I'd guess, but not an outright prohibition because this technology is not going to go away."

According to the Times, 3 million new cell-phone users let their fingers do the walking each month and 85 percent of the United States' 110 million cell-phone users are on the phone while driving - a fact that safety advocates and accident victims are likely to stay hung up on for some time. - Heather Brewer